Manila International Airport Authority v.

Court of Appeals
495 SCRA 591

PONENTE

CARPIO, J.

FACTS

Manila International Airport Authority (MIAA) operates the Ninoy

Aquino International Airport Complex in Paraaque City. As operator of the
international airport, MIAA administers the land, improvements and
equipment within the NAIA Complex.

The MIAA Charter transferred to MIAA approximately 600 hectares

of land including the runways and buildings (Airport Lands and
Buildings) then under the Bureau of Air Transportation. The MIAA Charter
further provides that no portion of the land transferred to MIAA shall be
disposed of through sale or any other mode unless specifically approved by
the President of the Philippines.

OGCC (Office of the Government Corporate Counsel) issued Opinion

No. 061, in which it said that the Local Government Code of 1991 withdrew
the exemption for real estate tax granted to MIAA under Section 21 of the
MIAA charter.

Therefore, MIAA was held to be delinquent in paying its taxes. The

City of Paraaque Levied upon the properties of MIAA, and posted
invitations for public biddings of MIAAs properties. MIAA filed with CA
an action for prohibition / injunction. The City of Paraaque averred that
Section 193 of the Local Government code expressly withdrew tax
exemptions from government owned and controlled corporations (GOCCs).

CA dismissed the petition for filing beyond the 60 day reglementary

period

ISSUE

Whether properties of the MIAA are subject to real estate taxes.

HELD

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 In the first place, MIAA is not a GOCC, it is an instrumentality of the
government. MIAA is a government instrumentality vested with corporate
powers to perform efficiently its governmental functions. MIAA is like any
other government instrumentality, the only difference is that MIAA is vested
with corporate powers. As operator of the international airport, MIAA
administers the land, improvements and equipment within the NAIA
Complex. The MIAA Charter transferred to MIAA approximately 600
hectares of land, including the runways and buildings (Airport Lands and
Buildings) then under the Bureau of Air Transportation. The MIAA Charter
further provides that no portion of the land transferred to MIAA shall be
disposed of through sale or any other mode unless specifically approved by
the President of the Philippines.

Furthermore, Airport Lands and Buildings of MIAA are property of

public dominion and therefore owned by the State or the Republic of the
Philippines. Article 419 of the Civil Code provides, The Airport Lands and
Buildings of MIAA are property of public dominion and therefore owned by
the State or the Republic of the Philippines.
The Civil Code provides:

ARTICLE 419. Property is either of public dominion or of private

ownership.

ARTICLE 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character;
(2) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national
wealth. (Emphasis supplied)

ARTICLE 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.

ARTICLE 422. Property of public dominion, when no longer intended for

public use or for public service, shall form part of the patrimonial property of the
State.

No one can dispute that properties of public dominion mentioned in

Article 420 of the Civil Code, like roads, canals, rivers, torrents, ports and
bridges constructed by the State, are owned by the State. The term ports
includes seaports and airports. The MIAA Airport Lands and Buildings
constitute a port constructed by the State. Under Article 420 of the Civil
Code, the MIAA Airport Lands and Buildings are properties of public
dominion and thus owned by the State or the Republic of the Philippines.

The Airport Lands and Buildings are devoted to public use because
they are used by the public for international and domestic travel and

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transportation. The fact that the MIAA collects terminal fees and other
charges from the public does not remove the character of the Airport Lands
and Buildings as properties for public use. The operation by the government
of a tollway does not change the character of the road as one for public use.
Someone must pay for the maintenance of the road, either the public
indirectly through the taxes they pay the government, or only those among
the public who actually use the road through the toll fees they pay upon
using the road. The tollway system is even a more efficient and equitable
manner of taxing the public for the maintenance of public roads.

The charging of fees to the public does not determine the character of
the property whether it is of public dominion or not. Article 420 of the Civil
Code defines property of public dominion as one intended for public use.
Even if the government collects toll fees, the road is still intended for
public use if anyone can use the road under the same terms and conditions
as the rest of the public. The charging of fees, the limitation on the kind of
vehicles that can use the road, the speed restrictions and other conditions for
the use of the road do not affect the public character of the road.

The terminal fees MIAA charges to passengers, as well as the landing

fees MIAA charges to airlines, constitute the bulk of the income that
maintains the operations of MIAA. The collection of such fees does not
change the character of MIAA as an airport for public use. Such fees are
often termed users tax. This means taxing those among the public who
actually use a public facility instead of taxing all the public including those
who never use the particular public facility. A users tax is more equitable
a principle of taxation mandated in the 1987 Constitution.

The Airport Lands and Buildings of MIAA, which its Charter calls the
principal airport of the Philippines for both international and domestic air
traffic, are properties of public dominion because they are intended for
public use. As properties of public dominion, they indisputably belong to the
State or the Republic of the Philippines.

Being a property of public dominion, the properties of MIAA are

beyond the commerce of man.

The term ports includes seaports and airports. The MIAA Airport
Lands and Buildings constitute a port constructed by the State. Under
Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are
properties of public dominion and thus owned by the State or the Republic
of the Philippines.

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